Thursday, June 19, 2008

Fair Trade

Free market capitalism as practiced by our major trading partners.

Just like oil being subsidized at a set price in India and other Asian countries.

If you insulate your population from high energy and inflation in staples, then you artificially make wages lower and they can 'compete' with the west. If you let prices fluctuate with the market then wages will rise and the wage advantage with the west evaporates.

Mexico freezes prices on 150 foods for 6 months
By ALEXANDRA OLSON, Associated Press Writer1 hour, 49 minutes ago
Food manufacturers promised Mexico's government to freeze prices on more than 150 food products Wednesday to help families cope with rising costs.

President Felipe Calderon announced that prices for goods such as cooking oil, flour, canned tuna, fruit juices, coffee, ketchup and canned tomatoes will remain fixed until Dec. 31.

"This is a measure that will positively and directly benefit the finances of millions of Mexicans," said Calderon, flanked by representatives of Mexico's business chambers. "This reflects the commitment of Mexican businessmen to the country and to price stability."

The Mexican leader has blamed high food costs on rising global energy prices, soaring food demand in China and India and the use of corn for ethanol production.

Food prices, especially rice, have reached historic highs almost everywhere in the world.
Calderon, a conservative elected in 2006, has already taken several steps to fight high prices. He eliminated import barriers on wheat, corn and rice in May, won an agreement from rice farmers to sell their crop at 10 percent below international market prices and last year imposed price caps on tortillas, Mexico's staple food.

He also announced small monthly cash subsidies to 26 million poor Mexicans, about a quarter of the population. The cash payments of about 120 pesos (US$11.6) a month are expected to cost about US$433 million.

Mexico's central bank said annual inflation rose to 4.95 percent in May, the fastest pace in more than three years, led by the swelling costs of food oils, rice, wheat products and corn tortillas. The country's daily minimum wage is about 50 pesos ($4.80).

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